Sri Lanka’s only oil refinery at Sapugaskanda has been shut down
Sri Lanka imposed electricity rationing Friday with the main power utility unable to buy fuel oil for its power stations as a result of the island’s worsening dollar crisis.
Oil normally accounts for around nine percent of electricity generation on the island, but a Ceylon Electricity Board (CEB) official said the company had run out of dollars to buy it from the state-run Ceylon Petroleum Corporation.
The CEB was having to rely on its coal- and hydro-powered generating facilities and was applying rotating one-hour power cuts around the island, he said.
He did not say how long the rationing would last but added that the 160-megawatt Sapugaskanda power station and a barge-mounted 60-megawatt generator at a Colombo port had been closed for an indefinite period.
“The power cuts are being imposed because the Ceylon Petroleum Corporation has not supplied us with fuel,” the official said.
Sri Lanka’s acute foreign exchange shortage has already led to rationing of milk powder, sugar, cooking gas and cement.
The island’s tourism-dependent economy has been hammered by the pandemic and the government imposed a broad import ban in early 2020 to try to save foreign exchange reserves.
The power cuts came as the country’s energy minister warned of an impending petrol and diesel shortage within two weeks.
Udaya Gammanpila said stocks of the transport fuels could run out by “the third week of January” unless orders were placed for fresh supplies.
“I have taken up this issue with the cabinet and told them eight times now to ensure that a part of dollar inflows are reserved for oil and medicines imports,” Gammanpila said.
He also urged motorists to reduce consumption. A 10 percent increase in prices two weeks ago was insufficient to discourage drivers, Gammanpila said.
The latest energy setbacks came as the country’s economic crisis showed signs of worsening, with the statistics office reporting record food inflation of 22.1 percent last month.
International rating agencies have downgraded Sri Lanka and expressed fears that the island may default on its $26 billion foreign debt after the country’s foreign reserves fell to dangerous levels.
Reserves were at $7.5 billion when the current government of President Gotabaya Rajapaksa’s administration took over in November 2019 and had fallen to $1.5 billion two years later.
The government’s announcement that a new Constitution will be unveiled within the next few months is in keeping with one of the ten key policy commitments in the President’s election manifesto. This announcement has encouraged several prominent constitutional experts to express opinions relating to constitutional reforms, perhaps in the hope of influencing the ongoing constitution making process. However, at the fundamental level, all these opinions for governance boil down to a choice essentially between parliamentary or presidential systems with their favoured variations.
At this fundamental level the choice for We the People” is whether it is in their best interests to grant their sovereign rights to a single body of elected representatives as in Parliamentary systems, or divide them between two separately elected branches of government as in Presidential systems, notwithstanding the fact that the system in Sri Lanka is not strictly Presidential as in the USA, but one that is Semi-Presidential because of the incorporation of Members of Parliament from the Legislature in the Executive branch.
PARLIAMENTARY v. PRESIDENTIAL
In a Parliamentary system, all power in respect of Legislative and Executive powers are exercised by the elected political party or coalition with the majority to form a functioning government. Under such an arrangement, the opportunity to exercise checks and balances by the Legislature over Executive action becomes blurred despite the fact that the Executive with its Cabinet of Ministers is answerable and responsible to Parliament. Furthermore, while the responsibility for formulating Policy relating to a particular subject is supposed to be that of the Minister and administering that Policy is supposed to be the responsibility of the Administrator, the distinctions between them become seamless because administrative decisions involve policy. This blurring of responsibilities gives the Minister the opportunity to involve himself in the Administration causing administrative action to be influenced by politics.
Addressing this issue that is inherent with Cabinet systems, Sir. Ivor Jennings in his book titled THE CONSTITUTION OF CEYLON” (1949) states: The Cabinet system implies a division between policy and administration. Administration is the function of paid officials; policy is the function of responsible Ministers. The line between them is often fine, because many administrative decisions involve policy. It is the duty of the official to put before the Minister every decision about which there may be any doubt in terms of policy; but it is equally the duty of the Minister to abstain from interfering where no question of policy is raised” (p. 87).
Such idyllic arrangements do not exist in real life. This is particularly so, as presently in Sri Lanka when Secretaries to Ministries responsible for Administration are appointed by the President with no reference to the Minister. Therefore, whatever the system, since the performance of Ministries and ultimately the Government depends on the symbiotic relationship between the Minister and the Secretary, it is imperative that the Secretary should be appointed by the appointing authority in consultation with the Minister so that they could work as a team to further the agenda of the Government. Problems associated with this relationship have been the primary cause for poor Executive performance
On the other hand, in a presidential system, Legislative and Executive power of the people are exercised by two separately elected bodies. Thus, for all intents and purposes, there is separation of power between these two branches of government. While this is so in countries such as the USA, where the two branches function and operate separately, it is not so in the Sri Lankan context of the presidential arrangement because the Prime Minister and the Cabinet of Ministers that form an integral component of the President’s Executive are from Parliament.
Such arrangements are referred to as Semi-Presidential. Under such systems too, the blurring of Policy and Administration that exist under Parliamentary arrangements with Cabinet systems continue. Therefore, there is an urgent need to revisit existing arrangements to ensure that arrangements are instituted for the development of Policy and its Administration in a manner that enables the President and the Executive to fulfill their commitments to the People.
REVISITING CURRENT ARRANGEMENTS
As long as the Cabinet system exists as part of the Executive, the difference between the Parliamentary systems that had existed in Sri Lanka e.g., 1972 Constitution, and what exists currently under a Semi-Presidential system, is marginal. For instance, under the 1972 Parliamentary system a nominated President appointed the members of the Cabinet of Ministers presumably on the advice of the Prime Minister. Similarly, the elected President under the current Semi-Presidential system appoints the Cabinet of Ministers on the advice of the Prime Minister. As before, the Cabinet of Ministers is charged with the direction and control of the Government of the Republic. However, since the People expect the President they elect to exercise their executive power including the defence of Sri Lanka, it is the President as the Head of the Cabinet of Ministers who should be selecting his chosen Ministers of the Cabinet. Furthermore, since it is the President who made certain commitments to the People in his Manifesto, the direction and control of the Government should reflect what he undertook to deliver to the People. The Cabinet of Ministers thus become the President’s team to fulfill his commitments to the People. This perspective should be reflected in the revisited arrangements
The direction and control of the government thus becomes the collective responsibility of the President and his chosen Cabinet. The responsibility of each Minister should then be to develop the Policies relating to the subjects assigned to him as part of the collective responsibility of the Executive. In the development of Policies relating to the assigned subjects, the Minister should be free to engage with anyone who in his opinion could contribute to the process. A draft Policy Paper that would be the outcome of such an exercise should be submitted to the Cabinet for review, comment and approval.
This should be followed by the Secretary to the Ministry as the Chair to determine how to administer the Cabinet approved draft of the Policy. The total package of Policies and Administrative measures should then be submitted to the Cabinet for review and comment so that any amendments could be incorporated into the final policy statement, which them becomes a collective decision of the Cabinet. The lack of attention given to the process of administering Policies is often the cause for failed Policies.
For instance, the Policy of the current Government was to use organic fertilizer and to ban imported chemical fertilizer and pesticides. Under the revisited arrangements, the Minister of Agriculture together with a team selected by the Minister would develop the Policies needed to implement the Policy of using organic fertilizer. The policies so determined would then be submitted by the Minister to the Cabinet for review, comment and approval. Having secured preliminary approval of the Policies, a working group headed by the Secretary to the Ministry of Agriculture should develop the Administrative measures needed to implement the Policies. If at this stage, serious challenges are imposed due to non-availability of material and/or resources to administer the Policy, the administrative process should be revised, or the Policy should be revised to suit capacities. Since such a decision would have far reaching political consequences the decision whether to phase out or forge ahead should be taken collectively by the Cabinet.
If the collective decision is to implement the Policy in stages, the Secretary should develop the administrative arrangements to ensure that the Policy is successfully implemented. On the other hand, if the collective decision of the Cabinet is not to phase out implementing the Policy, it is the responsibility of the Secretary to develop strategies needed to implement the Policy. The total package of Policy and the administrative arrangements needed to implement the Policy should then be submitted to the Cabinet for approval.
The approach suggested above is in keeping with the concept of the Cabinet being collectively responsible for the direction and control of the Government. The revisited approach may appear too complicated. However, the reason why good Policies have failed to meet expectations is because of poor planning and lack of due attention to effective administration. The fact remains that if what is proposed is too cumbersome some alternative has to be developed to ensure that collective decisions are reached, as long as the Cabinet systems remain as part and parcel of the Executive.
RESPONSIBILITIES of PARLIAMENT
The primary responsibility of Parliament is to exercise the Legislative power of the People. Equally important is for Parliament to oversee executive action. In this regard, Articles 42 and 43 (1) of the 20th Amendment to the Constitution state: 42. The President shall be responsible to Parliament for the due exercise, performance and discharge of his powers, duties and functions under the Constitution and any written law, including the law for the time being relating topublic security.43. (1) There shall be a Cabinet of Ministers charged with the direction and control of the Government of the Republic, which shall be collectively responsible and answerable to Parliament.
Apart from the question of how a President directly elected by the People could be responsible to another organ of Government – the Parliament, also directly elected by the same People, the fact is that the President and the Cabinet of Ministers are collectively responsible to Parliament means that Parliament is Constitutionally entitled to review Executive action. Although the Constitution does not spell out how Parliament is to fulfill this specific responsibility, the Standing Orders of Parliament contain provisions under Sectoral Oversight Committees and Ministerial Consultative Committees that could be modified to serve as a mechanism to oversee Executive action of the President, and the collective and individual actions of the Cabinet and its Ministers. Since the focus of these Committees is to address issues relating to Legislature, they should be revised, expanded and strengthened to oversee Executive action and incorporated in a revisited Constitution.
INDEPENDENT COMMISSIONS
Appointments to Independent Commissions were made by the President on the recommendations of the Constitutional Council under the 19th Amendment and now by the Parliamentary Council under the 20th Amendment. The Constitutional Council consisted of ten members of which seven were from Parliament. The present Parliamentary Council consists of five members and all of them are from Parliament.
The question that arises is how realistic is it to expect Councils made up of either a majority or its entirety from Parliament, to be objective enough in the appointment of Independent Commissions. If the intention is to create an independent and productive Public Service, the arrangements that exist today are a far cry from what were intended, because what Sri Lanka has inexorably and unwittingly ended up is to politicize the Public Service and weaken its motivation for effective administration. The temptation to politicize was in the misguided hope of the political establishment that administering policies with hand-picked officers who would personally be loyal to them would enable them to achieve their objectives. The consequence of this trend was to demoralize the rest to a point of believing that without political patronage there is no future for them in the Public Service. In such a background, complaining about them would not get the political establishment its desired outcomes. Instead, they should realize that it is in their own interest to have an effective Public Service without which their policies would not be implemented. Therefore, it is imperative that the prevailing trend is reversed.
To do so the arrangements instituted to set-up Independent Commissions should be scrapped, and the existing Presidential Council should focus on setting up an effective Public Service Commission vested with executive powers of appointment, promotion, transfer, disciplinary control, dismissal of public officers including addressing of grievances of the public. The fact that the 20th Amendment has deleted The Audit Service Commission and The National Procurement Commissions that had existed in the 19th Amendment, attest to the fact that the functions of these Commissions could be transferred to the Public Service Commission. A further development is that the Police Commission only handles public grievances. The rest of the functions of the Police Department have already been transferred to the Public Service Commission. In keeping with this trend, other Commissions too should be scrapped except for the Human Rights and Judicial Commissions. An effective Public Service Commission means that even the role of the Ombudsman becomes superfluous, because it should be possible for the Commission with expanded executive power to address grievances of the Public more effectively, since grievances of the public are invariably due to dereliction of duties of public servants.
CONCLUSION
The need for a new Constitution is based on the premise that the Constitution in its present form is a fetter to the progress and development of Sri Lanka. How valid is this perception? The material presented above, if viewed objectively, demonstrates that the real impediment to progress and development is the form and manner in which the Constitution operates.
The Constitution in its present form is not a true Presidential system that is based on the separation of power as in the United States. Instead, it is a Semi-Presidential system because of the inclusion of members of Parliament in the Executive Branch as members of the Cabinet. What is proposed herein is to retain the existing structure for practical reasons, but amend the form and manner in which it functions so that predetermined Executive Policies could be effectively administered.
This approach is predicated on the premise that the reason for poor performance is because of the mismatch between Policy and Administration. A match between the two could be initiated by formulating fresh procedures and revisiting existing constitutional provision through amendments, instead of a new Constitution.
Another concern of major importance is the lack of Constitutional provisions to address Executive performance despite the fact that constitutionally the President and the Cabinet are collectively responsible to Parliament. What is recommended is to use existing provisions under Standing Orders relating to Sectoral Oversight Committees and Ministerial Consultative Committees, and adapt them to address Executive action as a constitutional imperative.
Finally, the concept of Independent Commissions whose origins could be traced to the Youth Commission, have not served their intended purpose, primarily because appointments to these Commissions by a Presidential Commission consisting of Members of Parliament have a political bias. What is proposed instead, is to scrap them and transfer all functions that were handled by Individual Departments to a seriously empowered Public Service Commission with sufficient executive powers to address grievances of the Public as well. This means that even the role of Ombudsman becomes superfluous.
The political establishment as a whole is dissatisfied with the public servants and the services they offer. The primary reason for this belief is that without political patronage their future advancement is bleak. If this perception is to change for the sake of an efficient and committed public service, the political establishment has to give up the practice of using hand-picked favourites for key positions at the expense of more senior and experienced members of the service. The independence of a Public Service Commission becomes their shield. The irony is that the success of a Minister’s performance depends on the commitment of the public servant, and if the Minister is to garner the full commitment of the public servant, he cannot afford to treat some as being more equal than others.
Has the country become rudderless? This is the question one asks oneself when one sees widespread chaos. The political authority does not take responsibility for virtually anything and baulks at taking decisive action. The cooking gas shortage, which has lasted for weeks, is not likely to be over anytime soon. People have been calling upon the government to make an intervention to sort out the problem, but to no avail.
Perhaps, at this rate, it may not be necessary for the government to have the cooking gas supply restored at all. People may not have any need for gas soon, for they will be left without anything to cook at home. Essential commodities are in short supply, and their prices are so high that most people cannot afford them. Only alcohol and cigarettes are freely available, and perhaps liquor outlets are the only places where one does not see long lines of consumers. The government has gone out of its way to ensure the availability of these two commodities as if people’s lives were dependent on them.
Paddy farmers have been up in arms, unable to save their cultivations as they are without fertiliser. So are vegetable growers. Anything that is hurried runs the risk of being buried. The government’ organic farming drive is a case in point; it should have been carried out over a considerable period of time with the participation of all stakeholders. Instead, it was rushed, and we are where we are today—facing the prospect of a food crisis. Agricultural experts predict a drastic drop in the paddy production during the current cultivation season. Farmers are shown on television complaining of an unusual delay in their rice plants reaching the heading stage owing to lack of fertiliser. This presages trouble.
The government has offered to increase the guaranteed price of paddy from Rs. 50 to Rs. 75 as part of its recently unveiled relief package. But this will bring no relief to farmers in that private traders are already paying as much as Rs. 95 per kilo of paddy, and, on the other hand, there will be no paddy to be purchased soon. This was confirmed by President of the United Rice Producers’ Association (URPA) Mudith Perera, yesterday, at a media briefing. Warning that the country would face a severe rice shortage from the end of next month, he urged the government to assess the yield losses due to the fertiliser crisis urgently and take precautions to avert the anticipated rice shortage. His prognosis is disconcerting; yield losses will invariably necessitate rice imports. (However, before importing rice, the government ought to inspect the silos of big-time rice millers to check if paddy has been hoarded.)
The government will have to import 800,000 to 1,000,000 MT of rice to meet the shortfall in the domestic supply, at a cost of USD 450 million, according to the URPA chief. This is a huge amount of forex the country could hardly afford at this juncture. There are several external loan instalments to be paid this year, and the government desperately needs dollars.
URPA President Perera has warned that the purchasing price of paddy is likely to go up to Rs. 125 soon owing to yield losses. If what is feared comes to pass, rice consumption will be a luxury only the super-rich could afford.
Curiously, the government has not sat up and taken notice of the situation. Trade Minister Bandula Gunawardena is apparently living in a world of his own. He visits Pettah wholesalers’ warehouses, from time to time, and declares that there are enough stocks of rice. His cavalier attitude must be one of the reasons why the irate public have begun hooting at government leaders. The Agriculture Minister is also at sea. He is impervious to reason, and bellows rhetoric. He seems to think that his job is to antagonise farmers.
Long queues are seen in most parts of the country with people waiting to buy cooking gas, kerosene, milk powder, etc. Unless the government cares to start shoring up stocks of rice urgently, there will be queues for rice as well sooner than expected. This is something it should not take lightly for its own sake; rice shortages have led to regime changes in this country.
The sacking of State Minister Susil Premjayantha is indicative of the government’s desperation to suppress dissent, which shows signs of getting out of hand. It could be considered the beginning of a purge of sorts in the SLPP. Premjayantha got President Gotabaya Rajapaksa’s goat, as it were, when he publicly declared, last Saturday, that the government’s organic fertiliser project had become a disaster, and led to a food shortage. He did not blame the President directly; he only inveighed against Agriculture Minister Mahindananda Aluthgamage, but one could see from his innuendos that his reference was to the President. However, what he said pales into insignificance in comparison to the scathing attacks some other SLPP MPs including several ministers have been carrying out on the government.
SLPP MP and former President Maithripala Sirisena has rightly pointed out that State Minister Nimal Lanza has said far worse things about the government, but nobody dares sack him. Lanza, according to Sirisena, knows too much. One cannot but agree with him. Other dissidents who are speaking their minds represent the constituents of the SLPP coalition, and therefore have some leeway to express their views. Unlike them, Susil is not a force to be reckoned with; he is at the mercy of the SLPP leadership for his political survival. One may recall that he struggled to get re-elected in 2020. He has thus become a soft target. It is only natural that he has been politically hanged, drawn and quartered as a warning to other SLPP rebels.
It will be interesting to see the vociferous dissident ministers’ reaction to what has befallen Susil. Curiously, they have chosen to remain silent on his ouster. Maybe, they are treading cautiously lest the Rajapaksas should get their heads, too, in the crosshairs. Let these worthies be told that first they came for ministry secretaries; then they came for a state minister, and the day may not be far off when they come for the dissident Cabinet ministers.
The SLPP rebel group raised hell when the government signed a secret agreement with the US-based New Fortress Company on the Yugadanavi power plant and the country’s LNG supply, but they are not protesting against the government’s questionable Trinco oil tank farm deal with India. Instead, some of them are flaunting the agreement with India as an achievement! It is popularly said in this country that a water monitor (kabaragoya) becomes a land monitor (thalagoya) when one feels like eating it.
SLPP rebels are taking on the government for different reasons. Some of them are doing so in good faith; they are seeking to pressure the government to make a course correction. Others are settling political scores with the SLPP leadership. Several former ministers who have failed to secure Cabinet portfolios in the present administration berate the current ministers in a bid to have the public believe that they would have done a better job if they had been appointed to the Cabinet. But they are no mavens; we witnessed their bungling and pathetic performance when they were Cabinet ministers in the Mahinda Rajapaksa government; their inefficiency, ineptitude and corruption made a huge contribution to the downfall of that regime. Even if all Cabinet ministers are replaced with a new lot, the government’s performance will not improve significantly.
Susil may not have acted out of principle when he criticised the government; he may have given vent to his frustration at being ‘benched’. Nevertheless, what he said about the agricultural sector, the cost of living and the poor performance of the government is true; and his remarks must have gone down well with the people who are struggling for survival. The fact that he can visit a fair without being hooted at shows that the people are not hostile towards the SLPP dissidents who have taken up the cudgels on their behalf. So, the government ought to take the dissidents’ criticism to heart and act accordingly instead of politically scalping them.
The government may be able to suppress dissent by resorting to coercion, but it will not be able to change public opinion, which has manifestly turned against it; the only way it could win back the irate public is to listen to them, improve its performance, and make good on its promises. A purge of dissidents will only make matters worse.
CB Governor denies such claims dismissing them as rumours spread by mischievous elements
New rules intended at wooing more services income and remittances appear to be backfiring
Some migrants say they would hold off repatriations beyond a bear minimum until the rules are scrapped
CB instructions appear to have caused some confusion among banks and clients
A state of confusion appears to have been created by the instructions issued to banks by the Central Bank with regard to conversion of bank balances of resident Sri Lankans who earn in dollars and Lankan migrant workers who remit money to their foreign currency bank accounts.
Some claim that balances in their foreign currency accounts are being forcibly converted into Sri Lankan rupees by banks citing the new conversion rules are ordered by the Central Bank.
They say some banks have resorted to convert the balances in their foreign currency accounts upon seeking their consent, while others have done so without prior notice.
While the people who receive income in foreign currency expressed their dismay over this practice, some irate migrant workers have said they wouldn’t send back money hereafter except for a bear minimum, until the authorities scrap the new conversion rules.
Meanwhile the Central Bank Governor, Ajith Nivard Cabraal who took to Twitter to respond to such claims categorically denied them, calling them both, rumours”, and total false”.
Rumors spread by some mischievous elements that Sri Lankan #banks have been ordered by @CBSL to forcibly convert balances in their customers’ #Forex accounts are totally false. #SriLanka #Fakenews,” he said yesterday. The extraordinary gazette notification issued on October 28 titled ‘Repatriation of Export Proceeds into Sri Lanka’, covered the services receipts including, professional/ vocational, occupational, and business services provided to persons resident outside Sri Lanka by persons resident in Sri Lanka”.
It also said the residual amounts of such services income receipts, after meeting several allowable expenses and commitments up to a month are subjected to conversion into Sri Lankan rupees on the 7th day of the following month.
However, these rules do not apply to inward remittances (worker remittances) to the country by Sri Lankans working abroad,” an explanatory note issued by the Central Bank subsequent to the circular said.
Hence, it begs the question as to how some of the migrant workers, who repatriate their foreign currency earnings,were subjected to these conversion rules as claimed by them.
Further, proceeds received by non-residents to the accounts maintained in the Offshore Banking Unit solely for collection purposes, where exports are not originating from Sri Lanka, are also not subject to these rules,” the gazette stated.
If instructions from customers were not received by the 7th day of next month for conversion, banks are required to convert export proceeds by the due date in the absence of documentary evidence from the exporter.”
In December last year, the Bar Association of Sri Lanka filed a writ petition at the Court of Appeal, challenging this rule which gives powers to convert professional fees received in foreign currency.
A fundamental rights (FR) petition has been filed seeking the nullification of the agreement signed with India to develop the Trincomalee Oil Tank Farm.
The petition was lodged before the Supreme Court by the Secretary of National National Bhikkhu Front, Ven. Wakmulle Uditha Thera.
A total of 47 parties including the Attorney General on behalf of the President, the Cabinet of Ministers including Energy Minister Udaya Gammanpila, the Ceylon Petroleum Corporation and its chairman, the Trinco Petroleum Terminal Pvt. Ltd., the Auditor General, Lanka IOC and the Defence Secretary have been named as its respondents.
The petitioner says, pursuant to the Constitution, the Cabinet of Ministers does not have the authority take such decision and that the manner in which the agreement was inked with India is unlawful.
The Cabinet of Ministers has violated the trust the public has placed in the government and has undermined the rule of law through this move.
Accordingly, the petitioner has requested the Supreme Court to issue an order to revoke this ‘arbitrary’ agreement.
He has also called for an investigation into the disputed decision taken by the Cabinet of Ministers.
The petitioner also wants this petition to be taken up before a special bench of the Supreme Court in terms of Article 132(3) of the Constitution.
Sri Lanka and India had inked the agreement in question last evening (January 06).
Sri Lanka’s Treasury Secretary, the Commissioner General of Lands, the Ceylon Petroleum Corporation (CPC), Lanka ICO and the subsidiary company Trinco Petroleum Terminal Pvt. Ltd are among the signatories of the deal, Ada Derana learns.
The Cabinet of Ministers on Monday gave its approval to the proposal tabled by the Minister of Power, for the implementation of Trincomalee Oil Tank Farm development project with India.
Thereby, 61 tanks at the oil storage complex will be jointly developed by the Ceylon Petroleum Corporation (CPC) and Lanka IOC as a joint venture.
Lanka IOC is a subsidiary of the Indian Oil Corporation which is under the ownership of India’s Ministry of Petroleum and Natural Gas.
A subsidiary company named Trinco Petroleum Terminal Pvt. Ltd. will oversee the joint development of these 61 oil tanks.
According to the government, the CPC will retain 51% of the shares from this joint venture while Lanka IOC holds on to 49%.
Meanwhile, the Cabinet has given its nod to further lease out Lanka IOC-run 14 oil tanks of the Lower Oil Tank Complex to the company for its business activities.
Additionally, 24 oil tanks will be allocated for the business activities of the CPC as approved by the Cabinet.
Sri Lanka and India reached the agreement to implement a project to jointly develop Trincomalee Oil Tank Farm, after reviewing three existing deals between the countries through diplomatic talks.
The two countries agreed to jointly develop and operate the farm, which consists of 99 tanks, over three decades ago but the entire farm was leased to India in 2003 for 35 years and Sri Lanka was unsuccessful in taking part of the farm as a sublease from Indian state-controlled IOC’s subsidiary Lanka IOC (LIOC) in 2017.
All lawmakers should unite as one group for the country’s future, President Gotabaya Rajapaksa said today (January 07) during an event held in Monaragala.
He made this remark addressing the augural ceremony of the 1,000 New National Schools establishment programme at the Siyambalanduwa Maha Vidyalaya this morning.
It is their collective responsibility to face the setbacks as a team, the President said further.
Criticizing only the shortcomings while avoiding this collective responsibility depicts a person’s incompetence, he added.
Another 588 persons have tested positive for the novel coronavirus today (January 07), the Ministry of Health reported.
This figure includes 07 persons who recently arrived from overseas while the rest are new community cases.
The total number of Covid-19 cases registered in the country thus far stands at 590,651 with the new development while the number of infected patients currently undergoing treatment went up to 8,792.
The recoveries tally reached 566,760 as 5,203 more patients were discharged upon recovery today.
Meanwhile, the Director-General of Health Services has confirmed 16 more coronavirus-related deaths for January 06, increasing the death toll in the country due to the virus pandemic to 15,099.
According to the figures released by the Government Information Department, the deaths reported today include 08 males and 08 females.
Four of the patients are between the ages of 30-59 years. The remaining 12 are in the age group of 60 years.
Another 588 persons have tested positive for the novel coronavirus today (January 07), the Ministry of Health reported.
This figure includes 07 persons who recently arrived from overseas while the rest are new community cases.
The total number of Covid-19 cases registered in the country thus far stands at 590,651 with the new development while the number of infected patients currently undergoing treatment went up to 8,792.
The recoveries tally reached 566,760 as 5,203 more patients were discharged upon recovery today.
COLOMBO (News 1st); Sri Lankan Trade Unions have raised concerns with regard to the agreement on the Trincomalee Oil Tank Complex, citing that the agreement could be an attempt completely have over the facility to India.
Meanwhile, in Trincomalee in the presence of Minister of Mass Media Dullas Alahapperuma, the Maha Sangha warned that they would have to take to the streets to protect national resources.
The government has planned to divide the 99 tanks and 827 acres of land in the oil tank complex near the Trincomalee port into three parts and hand them over to three companies for a period of 50 years.
As per the resolution approved by the Cabinet in late December 2021, 14 tanks are to be leased to the Lanka IOC, 24 tanks to the Ceylon Petroleum Corporation, and the remaining 61 tanks to a joint venture between India and the Ceylon Petroleum Corporation.
A new company has already been registered to lease 61 tanks and the land for 50 years.
This new venture is called the Trinco Petroleum Terminal Pvt.
According to the government, the CPC owns 51 percent of the company and the Lanka IOC will own the remaining 49 percent.
According to data from the Registrar of Companies, the company is currently registered and its sole shareholder is the Petroleum Corporation.
Its current chairman Sumith Wijesinghe has been appointed as the sole director.
There are now mounting concerns over the future of Trinco Petroleum Terminal Pvt.
SL lags behind Pakistan, Bangladesh and Nepal in exports to China
Exported only US$ 280 million; imports US$ 4 billion from China in 2020
Huge potential for SL products such as tea, coconuts, seafood, readymade garments
Colombo should catch the bull by the horns and resume talks on FTA
Fertilizer incident addressed now
Sri Lankan ambassador to Beijing Dr. Palitha Kohona speaks to Daily Mirror regarding the present status of Sino-Lanka bilateral relations in the event of fertilizer crisis involving Chinese company Seawin Biotech which even threatened to complain against Sri Lankan state banks to the international rating agencies. The Excerpts:
Q As Sri Lankan ambassador to China, how do you view the bilateral relations in the context of the fertilizer crisis?
Our bilateral relationship is multi-dimensional. It is not dependent on one single factor or even a range of minor factors. There could be ups and downs. That could happen in any relationship whether it is personal or international. There are misunderstandings. There are issues that come up unexpectedly .The most important thing is to address them to the satisfaction of both the parties. I personally believe the fertilizer incident has been addressed. We are back on track. Hopefully, we will not have a similar situation again. Or even if something like that crops up again as it possibly might, we should be able to deal with them as two mature countries without getting carried away unnecessarily. Especially in commercial dealings, issues arise. That is why we have arbitration provisions in commercial agreements and mediation. We have the possibility of accessing to legal system, to the courts of law. All that is there because we anticipate disagreements and misunderstandings. I am sure that, given the nature of our relationship, we are capable of dealing with situations of this nature adequately to the satisfaction of both the countries.
Q But the Chinese company said that it would lodge a complaint to the international rating agencies against Sri Lanka’s state banks. How would it affect bilateral relationship?
According to information which I have received, the matter has been addressed and resolved. I have no access as to what the media is reporting and the background to it.
“We need to realize Sri Lanka is a country that cannot remain a poor third world country forever. All around us, countries are steaming ahead us. Even Bangladesh, which in 1971 was described as a basket case, is in a position today to assist Sri Lanka financially because they have taken a pragmatic approach to the world. Of course, when investors come in, we need to be careful how we manage them”
Q In which manner has it been addressed?
I must repeat that I don’t think I should go into details. Nothing has been publicly announced. I believe we should leave it at that. By stirring the pot, I don’t think we are going to get any satisfaction for either side.
Q In Sri Lanka, we notice a difference in Chinese approach to bilateral relations. The Chinese reach out to the north and seek to invest there. They remain engaged with the opposition. They made a donation to the opposition leader to carry out his Covid-related charity work. How do you see this approach as the Sri Lankan ambassador in Beijing?
This is quite normal as any ambassador who represents his own country overseas. He does not represent his country only with the ruling party. Especially in a democracy like ours, it is quite possible, conceivable that opposition would come into power at one point or the other. It happened in 2015. It is quite normal for a diplomatic mission to maintain good relations not only with the government but also with the opposition parties as well. You see this with western embassies. They engage with a whole range of political entities, the entire spectrum in fact. It is very common for ambassadors, political officers and other diplomats to deal constantly not only with the government officials, entities but also with the entities representing other political, social and religious viewpoints etc. I think it is a very good thing that the Chinese ambassador made a visit to the north. Everyone saw the photograph of him entering Nallur temple discarding his shirt. It is good that Chinese are reaching out to our main minority and also establishing good links with them.
Q China and Sri Lanka could not carry out a lot of activities because of the pandemic. The pandemic situation has eased a bit now. How do you intend to carry out bilateral activities?
The pandemic situation has been contained to some extent in Sri Lanka. In China, they have a very rigid policy. The country remains closed. No Chinese nationals are allowed to travel outside other than for specific purposes. Tourism does not exist anymore. No foreigners are allowed into the country other than going through very rigid entry controls. As far as China is concerned, although they are probably the safest country on the earth at the moment, the movement in and out of the country is strictly controlled. I don’t see the possibility of normal travel being restored between the two nations. As you know, we are expecting a visit by the Foreign Minister of China to Sri Lanka early January. As the embassy, we are hoping that we could arrange more visits of that nature. Bilateral visits are very important. For the last couple of years, no leader other than Wang Yi and Yang Jiechi , has visited Sri Lanka. No Sri Lankan leader has visited China. We would like to see high level visits resume. But again, it all depends on how the pandemic is controlled by both sides. China is particularly sensitive about the pandemic situation here. In Xian, the number of cases were detected over the last few days. The city was kept under lockdown. Here they maintain very strict control. If there is any slightest indication of cases occurring, they introduce very rigid controls. Other than that, China remains largely free of the virus. It is a good sign. This is a country with 1.4 billion people. The Chinese authorities have taken the view that it is very important to control the infections to the strictest extent possible.
“This is quite normal as any ambassador who represents his own country overseas. He does not represent his country only with the ruling party. Especially in a democracy like ours, it is quite possible, conceivable that opposition would come into power at one point or the other. It happened in 2015. It is quite normal for a diplomatic mission to maintain good relations not only with the government but also with the opposition parties as well”
Q How would it affect the investments?
That is a very important question. Over the last 12 months, we have been talking to a large number of Chinese companies. Many have expressed interest in the potential Sri Lanka has. I know that two big companies have sent their representatives to Sri Lanka. Power China is one. KY Electric is another. Power China is interested in building residential units in Colombo and outside. KY Electric is interested in renewable energy. We held talks with China Harbour, China Great Wall, Power Steel, etc. These are only a few of them. All of them have shown keen interest in investing in Sri Lanka catering not only to the domestic market but also to the wider regional markets. We have been encouraging them. One of the reasons for nothing tangible to be eventuated so far is the inability to send their specialists to Sri Lanka to assess the situation at ground levels. Once travel is restored to some extent, we can expect many of these companies to show greater interest in Sri Lanka. We have also encouraged travel companies to invest in Sri Lanka. One company with a client base of over 40 million is interested in developing resorts in Sri Lanka, like the resorts in southern Europe or Hainan Island. We can expect it once things return to some sort of normalcy. Many other companies will make a beeline to Sri Lanka. Sri Lanka has now got a stable government. It has easy access to the regional markets. It is not an insignificant regional market whether we are looking at Africa, the Middle-East, India, Pakistan, South-East Asia, and Australia. Then of course, we have been talking to everyone about the investor-friendly policies adopted by the government. Everyone knows Sri Lanka is a friendly country at political level. This creates a level of confidence. I think it is very important for investors, mostly the type of investors we are talking about. Some of them are in the global Fortune 500. It would be good for Sri Lanka to have some of those investors. They may also work as catalysts for investors from elsewhere, whether they are from the United States, Europe, Russia, Australia, Japan and Korea. The line we have been focusing is to encourage some of the big names to invest in Sri Lanka. That will operate as an incentive or a bait for other companies from around the world to come.
Q What are the investments lined up as far as Colombo Port City is concerned?
A very serious offer has been made by Power China and China Harbour. It is quite likely that over the next few months, they will invest substantial amounts in the port city. Again, this will be a flagship investment which will hopefully be an attraction to others to follow-suit. We are hopeful that companies from India, Europe and the United States will follow these big investments in the financial centre and the marina and in the convention centre. Our expectation is that once the Chinese companies move in, the others will find it difficult not to move in simply to maintain their presence in Sri Lanka and in the region.
“A very serious offer has been made by Power China and China Harbour. It is quite likely that over the next few months, they will invest substantial amounts in the port city. Again, this will be a flagship investment which will hopefully be an attraction to others to follow-suit. We are hopeful that companies from India, Europe and the United States will follow these big investments in the financial centre and the marina and in the convention centre”
Q There is an argument by some parties that Chinese presence in Sri Lanka is too much. How do you see this?
My job is to promote Chinese investments in Sri Lanka. Sri Lanka needs investments. We can get into this type of arguments. For 300 years, we had colonial occupation of the country. We need to be a little more rational. Investments are investments whether they are Chinese, Indian or European. The Europeans occupied us, controlled us and dominated us for three centuries. This continues to dominate our financial systems. I think we need to realize Sri Lanka is a country that cannot remain a poor third world country forever. All around us, countries are steaming ahead us. Even Bangladesh, which in 1971 was described as a basket case, is in a position today to assist Sri Lanka financially because they have taken a pragmatic approach to the world. Of course, when investors come in, we need to be careful how we manage them. Not every investor should be encouraged to come to Sri Lanka. We should decide what is best for us and what will be better for our future, children. Our children need opportunities. I don’t see any pride when people proudly say that 1.4 million of our youth are driving tuk-tuks. We need to get out of that mentality and provide opportunities for our young people to do better in life. To do that, we need investments.
Q What kind of cooperation is in store for Sri Lanka to get over the foreign exchange crisis?
China has helped us a great deal in the current situation. It approved a swap arrangement amounting to 10 billion RMB. It is roughly over US$ 1.5 billion. Earlier, China made available to us funds through China Development Bank, Asian Infrastructure Investment Bank (AIIB). China has been doing its bit to help us as much as possible. We need to be conscious of that. If not for these Chinese funds, we would have been in a deeper mess now. Of course, there are circumstances which are beyond our control. Nobody expected the pandemic to affect us in this manner. Our tourism crashed. That was a major source of foreign exchange for us. Our remittances from expatriate workers also shrunk substantially. Traditional markets for our exports were affected. Hopefully, the pandemic will ease up. Our exports, tourism and remittances will recover. In the meantime, we need to cope up with the problems. We are confronting problems such as repayment of loans and interest repayment. China has been more than willing to come to our help. In addition to findings that have been made available, they gifted three million doses of Sinopharm vaccines, and another 23 million doses were provided at very low, concessionary rates.
Now, one of the main areas we are focusing is to increase Sri Lanka’s exports to China. We are not exporting enough considering that the nature of our relationship is very close. In 2020, we managed to export only US$ 280 million worth of goods whereas China exported US$ 4 billion worth of goods. Our performance is weak compared to performance of countries like Pakistan, Bangladesh and even Nepal. We cannot even fall in the same league as Malaysia, Singapore or Vietnam. They export huge quantities of agricultural, fishery and industrial products to the Chinese market. We have been working towards increasing our exports. It is essential. We just cannot continuously look for financial assistance.
“Over the last 12 months, we have been talking to a large number of Chinese companies. Many have expressed interest in the potential Sri Lanka has. I know that two big companies have sent their representatives to Sri Lanka. Power China is one. KY Electric is another. Power China is interested in building residential units in Colombo and outside. KY Electric is interested in renewable energy. We held talks with China Harbour, China Great Wall, Power Steel, etc. These are only a few of them. All of them have shown keen interest in investing in Sri Lanka”
One of the suggestions made is that we need to resume our negotiations on the Free Trade Agreement (FTA) or an early harvest agreement. This was the approach taken by Pakistan, Bangladesh. They went for early harvest agreements. As a result today, Pakistan exports even Basmati rice and mangoes. ASEAN countries have FTAs with China. Shops are full of exports from ASEAN countries including young coconuts, pineapples, Durians and Rambutans. There are other high value items. We need to take this very seriously. We are working on this at the embassy. Of course, we need the necessary support from Colombo. Colombo needs to take the bull by the horns and resume negotiations on the FTA, or at least negotiate an early harvest agreement. Any agreement depends on how we negotiate. This is the most lucrative market in the world. Chinese are spending money in a crazy manner. They are buying up everything. I did a live streaming show for Sri Lankan tea and coconut products. The goods we had on sale were sold within 30 seconds after I came on the screen. In China, there is a great demand for Sri Lankan high quality black tea, especially if they are packed attractively with geographical indication. At the moment, we export tea work US$ 57 million. We can easily bump it up to over US$ 100 million in very quick time. Then, there are coconut products such as coconut water. King coconut is a product with a huge market in this country (China). We can expand it very, very quickly. We are trying to gain a wider range of seafood products. We have succeeded in 29 varieties of fishery products. We will work on more varieties of seafood.
The Chinese market for high quality readymade garments is expanding. We need to expand on that. I have suggested that the Joint Apparel Industry locate an officer in Beijing to pursue this market on their behalf. We need someone to concentrate on this market alone. We need to work on the Chinese tourism market. When the doors open, I am confident that Sri Lanka will be a prime destination for them. In 2019, 169 million Chinese travelled overseas. We need to get a small fraction of them to help us.
Q Geopolitical rivalry involving China, India, the USA and Japan play out in Sri Lanka. How can we strike a balance while maintaining good relations with all?
This is not something new to Sri Lanka. Even in 1950s, 1960s and 1970s, there were cold wars. We maintained a non-aligned stance. Both sides respected us. We did not give away bits and pieces of sovereign territory to keep this rivalry at bay. We just managed that relation well. We benefitted from it also. It can be done. It must be done in the future. Sri Lanka is a sovereign nation. We went through horrendous internal conflicts. We maintained our territorial integrity. We should treasure what we sacrificed for so much. We should go forward keeping that mind.
COLOMBO (News 1st); Adequate chemical fertilizer will be imported in time for the upcoming Yala season, says Minister of Agriculture, Mahindananda Aluthgamage.
Speaking to media, the Minister admitted that as there is not enough time to purchase chemical fertilizer and use it for the existing Maha season, the fertilizer necessary for the Yala season will be imported by upcoming April month.
Moreover, he stated that fertilizer companies have already placed orders and there will be no shortage of chemical fertilizers in the market by the coming Yala season.
Meanwhile, the Minister mentioned that the Paddy Marketing Board will purchase paddy from any farmer at Rs. 75 per kilo this season due to the complaints received regarding the reduction in production.
When inquired whether the Government would raise the selling price for paddy, the Minister said that a kilo of rice will still be sold for Rs. 50, and the Government will bear the loss of Rs. 25,000.
Politicians of the government, as well as the opposition and the Maha Sangha, expressed their views regarding the current political situation and various crises today (06)
Highways Minister Johnston Fernando states that although there are reports of gas explosions islandwide, there are no reports of gas explosions in Colombo 07.
The Minister pointed out that no such incidents have been reported in the Northern Province or in areas such as Kandy and Kurunegala and that doubts have arisen if there is a conspiracy behind these incidents
The ceremony to open the new three-storied building of the Maliyadeva Balika Vidyalaya in Kurunegala was held under the patronage of Prime Minister Mahinda Rajapaksa this morning (06).
Addressing the gathering, the Minister said that the new year should move forward with a positive outlook and that a proper program should be formulated to find solutions to the many crises caused by the COVID pandemic in recent years.
The Minister of Highways further stated that due to the depletion of foreign reserves in the country, the people have faced an increase in the prices of goods and the President has carried out a meticulous investigation into the gas explosions that have taken place.
The Minister said that the government has already taken all necessary steps to ensure that the education of children with disabilities is carried out systematically this year.
Minister of Education Dinesh Gunawardena and several others were also present at the occasion.
SSP Thalduwa made these claims to the media in relation to the incident where an activist was questioned by the CID for posting a video on social media of the public verbally protesting against President Gotabaya Rajapaksa as he was travelling through Mirihana. FactCheck.lk assessed these claims by analysing the provisions of the Constitution and judgments of the Supreme Court of Sri Lanka.
Article 14(1)(a) of the Constitution of Sri Lanka vests every citizen with the freedom of speech and expression. Under the Constitution, the freedom of expression can be restricted only by law for the protection of, among other things, national security, public order, racial and religious harmony, parliamentary privilege, or to prevent incitement to an offense. The legality of publishing insulting statements against the president or government was dealt with in the 2015 judgement of the Supreme Court (SC) in Wahalathanthri v. Jayantha Wickramaratne, Inspector General of Police [S.C. (F.R.) Application No. 768/2009]. In this case, the police sought to prosecute two persons under Section 120 of the Penal Code for carrying harshly worded placards that protested the government. In its determination, the SC declared that the publication of defamatory, embarrassing, or insulting statements against the president or government is a lawful and democratic exercise of the freedom of expression.
The SC also held that the police cannot prosecute members of the public for merely publishing defamatory, embarrassing, or insulting statements against the president or government, and that Section 120 of the Penal Code would apply only if such statements were intended to incite violence.
The above analysis confirms that publishing statements that merely insult or defame the president does not attract any criminal liability. As no criminal liability attaches to the making of statements that insult or defame the president, there is no lawful basis for the police to take legal action against persons who publish or exchange such statements. Therefore, we classify SSP Thalduwa’s statement as FALSE.
**FactCheck.lk’s verdict is based on the most recent information that is publicly accessible. As with every fact check, if new information becomes available, FactCheck.lk will revisit the assessment.
FactCheck is a platform run by Verité Research. For comments, suggestions and feedback, please visit www.factcheck.lk.
A total number of 11,380 tourists had arrived in the island in the first four days of the new year Russian tourists head the list with 2,032 visitors, Tourism Minister Prasanna Ranatunga said.
Moreover, 1,809 tourists, from India, 1,041 from Ukraine, 775 from Germany, 709 from the UK, 506 from Kazakhstan, 506 from the Maldives, 420 from Australia, 414 from France and 282 from Poland were among those arrived in the first four days of January.
The minister said 194,888 tourists have arrived in the country in the year 2021 after the reopening of the country.
The Minister said that only 1,682 tourists have visited Sri Lanka in January 2021.
He said steps will be taken to make this year, the best year for the tourism industry.(DarshanaSanjeewaBalasuriya)
Agreement to develop Trincomalee Oil Tank Farm was signed this evening, Energy Minister Udaya Gammanpila said.He said in a twitter post that signatories were Treasury Secretary, Land Commissioner General, Ceylon Petroleum Corporation (CPC), LIOC and Trinco Petroleum Terminal Ltd.”85 of the 99 tanks will come under Sri Lanka’s purview, which were under India,” the Minister tweeted.
The Ministry of Health reports that another 584 persons have tested positive for coronavirus within today (06), as the country’s tally of confirmed cases crossed the 59,000-mark on Thursday.
This figure includes 12 persons who had arrived from overseas while the rest are new community cases.
The total number of Covid-19 cases registered in the country thus far stands 590,063 with this while the number of infected patients currently undergoing treatment is 13,423
Meanwhile, the Director-General of Health Services has confirmed 18 more coronavirus-related deaths for January 04, increasing the death toll in the country due to the virus pandemic to 15,065.
According to the figures released by the Government Information Department, the deaths reported today include 12 males and 06 females.
Five of the patients are between the ages of 30-59 years. The remaining 13 are in the age group of 60 years.
Colombo, Jan 5 (EFE).- The severe economic crisis affecting Sri Lanka, with record inflation and the possibility of the country failing to pay its financial debts, has forced families to give up meals due to shortage of food and steep prices.
Our only option was to cut down on food consumption. Sometimes we only have two meals a day. At other times we cook once a day and eat sparingly,” Priyanka Kumari, 44, from Boralesgamuwa in the country’s Western Province, told EFE.
Household incomes have been hit hard by the crisis, while inflation shot up to 11 percent in November, the highest in 13 years.
Kumari said she used to make a living by selling cooked food but had to stop when prices of the ingredients soared, after the government imposed import restrictions to mitigate a foreign currency crisis.
When we increase prices, people don’t buy,” she said.
Vegetable prices have tripled this December compared to the same month last year, according to the latest National Consumer Price Index.
Prices of rice, a basic food item in the country, have also shot up along with flour and bread, while fuel prices have risen sharply, up to 85 percent in the case of cooking gas.
A drastic fall in tourism due to the pandemic, with the crucial sector coming to a complete halt due to borders being closed for months at a time, has been another blow for Sri Lankans.
When Covid-29 first hit, the country stopped allowing tourists. As a result, my salary was reduced by 50 percent,” Lahiru Sameera, a 26-year-old former employee of the sector, told EFE.
On Tuesday, the Sri Lankan government announced an aid package worth $1 billion for the poorest section of the country, public sector employees and senior citizens.
Cabinet spokesperson Dullas Alahapperuma said that the aid would help ease economic pressure on these sections of the population.
The measure includes a payout of 10,000 Sri Lankan rupees (around $50) per family to promote home gardening.
Amid the grave economic crisis, Sri Lanka has witnessed its foreign currency reserve dwindle in recent years and is now burdened with high levels of both public and private foreign debt.
The country needs to pay $500 million in international sovereign bonds by the end of January, and around $6.9 billion by the end of the year in domestic and foreign loans, according to rating agency Fitch, which reduced Sri Lanka’s long-term sovereign rating to CC from CCC last month, due to the possibility of the government defaulting on payments.
Sri Lanka’s foreign currency reserves have dropped by around $2 billion since August, going down to $1.6 billion by late November, according to the agency.
However, Colombo has insisted that it would not default on the payments.
Cabinet co-spokesperson and Plantations Minister Ramesh Pathirama told reporters on Tuesday that the tourism sector and exports were gradually improving.
We are also planning to increase local production. For example, distributing fresh milk instead of powdered milk. We have imported a large amount of medicine for a long time. We have started to produce our medicine,” he said in a presser.
The government is also negotiating credit line facilities with China, India and Japan.
Dharma Vijaya Buddhist Vihara organization has planned to give the opportunity to a team of youngsters (age 17+) to be sponsors and organizers of the 2022 Kathina ceremony. Our goal is to give full responsibility to this young team for conducting all the tasks and events from the initiation- Kathina invitation day (Saturday, July 9th, 2022) to the Katina Robe offering day (October 8 & 9th, 2022) at the end of the ceremony.
We kindly invite all the young devotees to join the “sponsoring and organizing team of the Kathina ceremony 2022” to gain experience of every single task of this wonderful and meritorious ceremony and help preserve our traditions for future generations.
Recently, Thailand has decided to provide the duty-free, quota-free (DFQF) market facility for Bangladeshi products in its market until 2026 to increase two-way trade volume. The declaration came as such facilities to Bangladesh by Thailand expired on 31 December 2020. It is high time to analyze the market situation of Thailand to devise appropriate strategies to get optimum benefits from the DFQF market facilities offered to Bangladesh.
The journey of Bangladesh–Thailand relations began on 5 October 1972 when Thailand recognized Bangladesh as a sovereign nation-state. The diplomatic ties began with the establishment of the Thai Embassy in Bangladesh in 1974. In order to promote bilateral trade between Bangladesh and Thailand, these two friendly countries signed a bilateral trade agreement on 22 August 1997. They have also formed a joint chamber of commerce to generate maximum output from their economic engagement.
From the very beginning of their relations, these two countries have been enjoying very warm bindings and have been working to deepen their bilateral ties for mutual benefits. The bilateral linkage between these two countries has been strengthened over time because of shared strong commitment to democratic values, efforts to foster international peace, harmony, and security. Their cultural, social, and religious linkage also contributed to blossoming the ties.
The current trade scenario between Bangladesh and Thailand
In South Asia, Bangladesh is the third-largest trading partner of Thailand. Although the bilateral trade between these two countries crossed USD 1.25 billion in 2018, it has experienced a declining trend after that time period. As Bilateral trade between them dropped to USD 910.05 million in 2020 from USD 1,067.90 million in 2019, they should work together to increase bilateral trade and investment.
Bangladesh basically exports vegetables, plastic items, rubber products, soap, animal goods, apparel, electrical & electronic equipment, fish, medicines, etc. to Thailand. On the other hand, Bangladesh imports cement, iron and steel, cereals, organic chemicals, machinery and mechanical appliances, synthetic fiber, and cotton fabrics, sugar, and sugar confectionery, etc. from Thailand. Bangladesh has a huge untapped bilateral trade prospect to discover with Thailand. It can export pharmaceuticals and health care goods, chemical products, leather goods, jute goods, frozen fish, knitwear and woven garments, ceramic tableware, tea, etc. to the Thai market. As these products have huge demand in Thailand, Bangladesh can earn huge foreign currency by exporting these goods with easy access, the DFQF, provided by Thailand. Bangladesh should also utilize this DFQF market access offered by Thailand to have competitive advantages
How can Bangladesh generate optimum benefit from the Thai Market?
If Bangladesh does its homework properly, then it can get maximum output from the DFQF facility offered by Thailand. Firstly, Bangladesh should analyze the Thai market to understand the Thai economy, its cultural practices, and social norms and then assess the consumption habits and patterns of Thai consumers. Bangladesh Embassy in Thailand, Ministry of Commerce and Industry, and Bangladesh-Thai Chamber of Commerce and Industry can jointly conduct this analysis.
Secondly, Bangladesh should promote local producers to boost their export to Thailand by providing different facilities such as creating backward linkage for easing production, arranging raw materials for the products that will be exported to Thailand, offering easy loans, etc. Thirdly, responsible government agencies should take initiative to promote and brand Bangladeshi products in the Thai market to increase market demand for Bangladeshi products.
Fourthly, Bangladesh may arrange or participate in a Trade fair organized in Thailand to inform the people there about Bangladeshi goods and services. Fifthly, a team of Bangladeshi businessmen may visit Thailand to have a better understanding of the products being sold there and to have an idea about the goods that might be exported there. Sixthly, the existing relations among the businessmen of both countries should be nurtured and expanded for giving the economic engagement a new shape. Seventhly, the governments of both countries should work shoulder-to-shoulder to simplify the regulations to boost exports and enhance bilateral economic engagement.
As Bangladesh has eight export processing zones (EPZs) and has undertaken initiatives to establish 100 Special Economic Zones (EZs), it should try to attract Thai investors by informing them of the different incentives and facilities available here such as tax holiday, One-Stop Service, etc. in EPZs and EZs. Government should allocate lands for the businessmen of Thailand in these EZs with easy terms and conditions. Both countries may rethink and take the joint initiative to flourish the tourism sectors in their respective countries. They should work to ease visa restrictions which not only will boost trade and investment but also make it easy for Bangladeshi to avail Thai healthcare facilities.
Bangladesh and Thailand have common membership in BIMSTEC which reflects that they have common interests and goals. Besides, in order to address bilateral trade-related issues, they have set up a joint trade commission which is really a praiseworthy initiative. As Bangladesh is officially going to be an LDC-graduate by 2026, it may face different challenges, e.g., cancellation of GSP facilities, which may have a negative impact on its export earnings. In order to avoid the decline in export earnings, Bangladesh should sign Free Trade Agreements with its friendly countries such as Thailand.
BIMSTEC or Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation has 7 members – India, Nepal, Bhutan, Bangladesh, Myanmar, Thailand, and Sri Lanka. The grouping is more than 20 years old and was formed in 1997. The last summit took place in Kathmandu in 2018 with PM Modi and other member-leaders attending the meet. BIMSTEC region has huge prospects for economic cooperation.
Sri Lanka is the chair of the grouping and had earlier proposed holding a virtual summit on 9th December which has now been postponed. According to the media reports, the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, better known as BIMSTEC, is likely to hold a summit of the heads of governments in Sri Lanka on March 30 in a hybrid setting providing scopes for both in-person and virtual participation.
Sri Lanka is a founding member of the Bay of Bengal Initiative for Multi-sectoral Technical and Economic Co-operation (BIMSTEC). Since its inception in 1997, Sri Lanka has been an active member of the Multilateral Forum. The archipelago presided over for the first time between 2002-2003, during which time Colombo promoted member states’ political commitments to strengthen sub-regional cooperation. As of 2016, BIMSTEC members accounted for only 17.4 percent of the total trade in Colombo trade goods. On the other hand, Bangladesh maintains friendly ties with almost all the neighbouring nations. This allows the country to play a bigger role in regional affairs.
Its imports from BIMSTEC accounted for only 23 per cent of its total imports and Sri Lankan exports to BIMSTEC members accounted for only 7 per cent. Moreover, India contributes more than 70 per cent of Sri Lanka’s trade with BIMSTEC. In parallel with the slow progress of BIMSTEC, Sri Lanka’s cooperation with BIMSTEC members has grown in place of snails.
In this context, Sri Lanka has been the Chairman of BIMSTEC from 2018-2020. Following which, Sri Lanka has the opportunity to ensure rapid cooperation between the member states of the Gulf region. During the Fourth Summit, the former President of Sri Lanka, Maithripala Sirisena, emphasized that BIMSTEC countries share shared aspirations for growth, development, trade and technology, and that Sri Lanka would facilitate this natural platform for the implementation of regional connectivity and economic cooperation. Actually, BIMSTEC has an important role to play in the regional trade area. All member states including Sri Lanka and Bangladesh should reap the benefits and exchanges this regional advantages. The BIMSTEC region has huge prospects for economic cooperation much of which still remains unexplored and unexploited.
Five members of the seven-member international organisation have already confirmed their participation in the summit, called by Sri Lankan president Gotabaya Rajapaksa, according tomedia reports. The countries that conveyed their confirmation are Bhutan, Myanmar, Nepal, Sri Lanka and Thailand.
Bangladesh and India, the two other members of the regional group of the countries around the Bay of Bengal, are expected to formally confirm their participation soon as the host, Sri Lanka, the outgoing chair of the group, sought concurrence of all member countries discretely about holding the meeting on March 30, media report said.
Prime minister Sheikh Hasina is expected to join the summit, to be held in Colombo. It is yet to be decided whether she will travel to Sri Lanka or join the meeting virtually. Foreign ministers and foreign secretaries of the BIMSTEC member countries are scheduled to meet on March 28 and 29 respectively for facilitating decision making at the summit on March 30.
The heads of the governments of the BIMSTEC member countries are expected to approve a charter for the organisation in the meeting after 24 years of its journey. The member countries ‘have completed the negotiation of the BIMSTEC charter and it is expected to be signed’ in the forthcoming fifth summit with participation of the heads of the governments in Colombo, BIMSTEC secretary general Tenzin Lekphell said in October.
The Colombo summit, the fifth meeting of the heads of the governments, was postponed twice in 2020 and 2021 due to the Covid pandemic. In addition to the BIMSTEC charter, three other legal instruments are expected to be signed at the summit. These are a BIMSTEC convention on mutual legal assistance in criminal matters, a memorandum of association on the establishment of BIMSTEC technology transfer facility in Colombo and a memorandum of understanding on mutual cooperation between diplomatic academies and training institutions of the member countries.
Bangladesh as the lead country for Trade, Investment and Development is strongly committed to strengthen BIMSTEC cooperation in this field. There is the importance of making all entities of the BIMSTEC process fully functional and operational. The BIMSTEC process needs concerted and quicker efforts and more intense engagements amongst the member states. It is imperative to forge more realistic partnership and shared endeavours to prosper together through exploitation of the full potential of this region.
The summit is also expected to reconstitute and rationalise 14 areas of cooperation into seven sectors, where each sector will be led by a member country. The foreign secretaries met 21 times, foreign ministers 17 times and heads of governments four times since the establishment of the BIMSTEC 24 years ago in 1997, while security advisers met thrice since 2017. Thailand is scheduled to take over the responsibilities of the BIMSTEC chair in the fifth summit in Sri Lanka.
BIMSTEC has identified 13 priority sectors, including trade and investment, transport and communication, counter-terrorism and transnational crimes, energy, climate, agriculture, poverty alleviation, tourism, public health and people-to-people contact. Bangladesh is the lead country for three areas – trade, investment, and climate, and has reiterated its fullest cooperation in this regard during the successive BIMSTEC ministerial meetings and summits.
According to media reports, in the current structure of bilateral trade among these countries, we see that most of the BIMSTEC members have experienced a considerable rise in bilateral trade over the years. A larger volume of exports was observed in the case of Thailand’s exports to India (US$ 5.5 billion in 2015); India’s exports to Sri Lanka (US$ 4.4 billion), Bangladesh (US$ 3.4 billion), and Nepal (US$ 2.6 billion); and Myanmar’s exports to Thailand (US$ 3.3 billion) and India (US$ 1.3 billion). Overall, India and Thailand are two major economies – both in terms of export and import – while Bangladesh, Sri Lanka, and Myanmar are three major economies in terms of import. The bilateral trade record of BIMSTEC countries indicates that the existing pattern of trade is heavily influenced by geographical proximity, relative size of the economies, and predominant trade routes.
BIMSTEC has received greater attention in the context of progressing co‑operation in the region. In addition to high-level diplomatic engagements, substantial steps have been taken towards co‑operation in a wide range of areas. In the fourth BIMSTEC summit meeting—which was held in Nepal’s capital, Kathmandu, in August 2018—member countries signed a memorandum of understanding on establishing a BIMSTEC Grid Interconnection to enhance energy co‑operation. This is expected to expedite the buying and selling of electricity between the countries—including those not directly bordering each other—once the cross-country grid infrastructure is in place. We expect tangible progress to be made in the field of energy co‑operation in 2019‑23.
New ground is also being broken in the security arena, as evidenced by the successful hosting of the first-ever joint military exercise between India and other BIMSTEC countries in September 2018. Each of the 14 areas of co‑operation under BIMSTEC is led by a particular country. That relating to security is headed by India and covers counterterrorism and transnational crimes. We expect that India will continue pushing for greater security co‑operation, particularly on counterterrorism. Furthermore, it is likely that in the next few years, member countries will undertake full ratification of conventions on mutual legal assistance in criminal matters and co‑operation in combating international terrorism.
The most significant breakthrough, however, is expected to be in connectivity. Five of the seven BIMSTEC member countries share a border with India, which includes the busiest land-customs checkpoint in Asia: The Petrapole-Benapole checkpoint between India and Bangladesh. Despite this, intra-regional trade accounts for only 5% of the grouping’s total trade; poor road connectivity is one of the main reasons. We expect progress to be made on transport connectivity over the 2019‑23 forecast period. In particular, the two main agreements, the BIMSTEC Coastal Shipping Agreement and the BIMSTEC Motor Vehicle Agreement—which are aimed at facilitating trade and transport linkages between member countries—are likely to be finalised over the next five years.
Despite the strong political thrust in favour of BIMSTEC, the organisation still faces manpower constraints and limited resources. This will be addressed partly by member countries’ increased commitment towards financial and human resources. Furthermore, areas such as negotiating a free-trade agreement—traditionally the focus of organisations that advocate regional co‑operation—will remain on the backburner in 2019‑23. Nevertheless, the importance of BIMSTEC will continue to grow, with India relying heavily on it to further its regional agenda. However, the upcoming BIMSTEC summit will ensure to create a common regional platform to address some common regional problems. Sri Lanka and Bangladesh as regional stakeholders have some common agenda such as strengthening connectivity, growing trade, tackling covid-19, terrorism, climate change, resolving and meditating Rohingya refugee crisis between Myanmar and Bangladesh etc. The upcoming BIMSTEC summit will provide the benefits for all regional states including Myanmar and Bangladesh. Sri Lanka and Bangladesh should fully utilize the potential.
